Canadian softwood producers brace for impact from new U.S. tariffs

Canadian softwood producers are bracing for the impact of new U.S. tariffs, warning about economic repercussions on both sides of the border while urging Ottawa to be more aggressive on the lumber file.

The new 10-per-cent tariffs on shipments of softwood lumber from Canada and other countries took effect on Tuesday.

U.S. President Donald Trump announced the new levies in late September, citing Section 232 of the Trade Expansion Act, which allows him to impose tariffs on the basis of national-security concerns.

The Canadian government has repeatedly said it recognizes the crucial role of the country’s softwood sector. But a joint statement on Tuesday by the leaders of 16 groups in British Columbia urged Ottawa to “bring the same urgency to the lumber file as it has to steel, aluminum and energy.”

Analysis: Can Canada finally sell more of its lumber overseas?

The country’s softwood producers warn that they will be hit especially hard because the new tariffs have been stacked on top of existing duties on lumber imported into the United States from Canada. U.S. import taxes now total 45.16 per cent on most Canadian producers.

“B.C. companies are being squeezed, workers’ paycheques are at risk and communities built around forestry are feeling the strain,” B.C. Forests Minister Ravi Parmar said in a statement.

Mr. Parmar, B.C. Premier David Eby, union officials and industry leaders held a news conference on Tuesday to advocate for the Canadian lumber sector. “There is no time to wait. Jobs and mills are on the line,” Mr. Eby said.

In an Oct. 10 letter to Prime Minister Mark Carney, Mr. Eby wrote that the combination of U.S. import taxes and plummeting lumber demand has “put many forest companies on a razor’s edge of survival.”

The U.S. National Association of Home Builders has cautioned about extra construction costs, including lumber expenses, with the implementation of new tariffs.

But the U.S. Lumber Coalition welcomed the new levies in a statement on Tuesday.

“This well-reasoned and appropriate measure will be critical to counter drastically escalating foreign unfair trade practices, such as Canada’s continued dumping and subsidization of its industry,” the coalition said.

It recently alleged that the $1.2-billion in supports for Canada’s softwood industry announced by Ottawa in August constitute an unfair subsidy.

For decades, Canada has rejected the U.S. positions in the softwood trade battle, saying that product from B.C. and other lumber-producing provinces is neither dumped nor subsidized.

Canada drops challenges to U.S. anti-dumping duties on softwood lumber

Kurt Niquidet, president of the BC Lumber Trade Council, said it’s unfortunate that the concerns of U.S. home builders have been drowned out by the U.S. Lumber Coalition’s lobbying.

He said it’s key for the Canadian government to place higher importance on resolving the softwood fight, which began in the early 1980s. “Make us a priority. Don’t forget about us,” Mr. Niquidet said in an interview.

The Canadian Lumber Trade Alliance is also sounding the alarm about the Section 232 tariffs. The alliance represents producers from B.C., Alberta, Saskatchewan, Ontario and Quebec.

The U.S. Department of Commerce raised duty rates in the summer. Lumber supplies that originate from sawmills in Canada are currently subject to an anti-dumping duty rate of 14.63 per cent and a countervailing duty rate of 20.53 per cent, totalling 35.16 per cent for most Canadian producers.

That’s up sharply from duties totalling 14.4 per cent previously.

Two major Vancouver-based companies are facing different rates under the Commerce Department’s calculations. Canfor Corp. CFP-T is now paying total levies of 57.59 per cent, including the new 10-per-cent tariffs, while U.S. import taxes against West Fraser Timber Co. Ltd. WFG-T now total 36.47 per cent.